- 1 Definition / Scope
- 2 Market Overview
- 3 Key Metrics
- 4 Market Risks
- 5 Top Market Opportunities
- 6 Market Drivers
- 7 Industry Challenges
- 8 Regulatory Trends
- 9 Other Key Market Trends
- 10 Market Size and Forecast
- 11 Market Outlook
- 12 Competitive Landscape
- 13 Key Market Players
- 14 Strategic Conclusion
- 15 Further Reading
- 16 Appendix
Definition / Scope
Cements are grey powder made by calcining lime and clay, mixed with water and sand to make mortar or concrete. It is used in the production of many structures like harbours, building, roads, bridges and runways. Cement industry is one of the foremost sectors of building materials industry. The different types of cement are:
Ordinary Portland Cement : It is suitable for all general concrete construction where special properties of cement are not required. It has less resistance to chemical attack and produces medium range of strength.
Rapid Hardening Cement : It is also known as 'High early strength cement'.The strength of this cement at 3 days is similar to 7 days strength of OPC. Consequently, this cement fastens the rate of construction and decreases cost of construction.
Low Heat Cement : This cement is prepared by maintaining the tricalcium aluminate percentage below 6 per cent and increasing the C2S proportion. It is used in mass concrete work and suitable to construct the structure.
Expansive cement : This cement is used for grouting anchor bolts and construction of water storage structure as it expands slightly with time and does not shrink.
Hydrographic cement : This cement in used for construction of water structures such as spillways, dams, tanks, etc.
Quick setting cement : This cement is used where work has to be completed in very short time. It contains minimal percentage of gypsum and aluminium sulphate.
Other types of cement include Air Entraining Cement, Colored Cement, White Cement, High Alumina Cement, Blast Furnace Slag Cement and Sulphates Resisting Cement.
In the beginning of 1949, the cement industry in China was small. There were many small cement kilns spread throughout villages and towns. Post 1980, large cement plants came into existence and several government owned cement producers emerged to raise production. However, after 2000 government began to lessen the number of small cement plants on the basis of level of emissions and inefficiency. This effort is ongoing. Today, the Chinese cement industry consists of 803 integrated cement plants with total production capacity of 1.48Bn/yr. China cement industry is the largest in the world, accounting for 60 per cent share of global cement production.
|Base Year||2018||Researched through internet|
- China is not able to export its surplus capacity as it does not have the international trading network to do so. Chinese cement lacks overseas import facilities like specialist terminals and grinding plants.
- As China has no cement plants on deep water it has to export via general ports. This makes the export expensive for China.
- The new emission limit by the China’s state council is expected to increase operating cost for cement companies. They will have to install technology like selective non-catalytic reduction system to reduce emission.
Top Market Opportunities
- The Ministry of Transport of China has issued a three year action plan (2018-2020) to build a modern China via construction of mega infrastructure facilities.
- The three year improvement action plan on Rural Living Environment to build and renovate 200,000 km of rural roads is expected to boost demand for rural development construction.
- The construction of Guandong-Hong Kong-Macau Greater Bay Area and Pan Pearl River Delta Region is expected to increase the regional demand for building materials. 2 per cent cement consumption is expected to increase in Guangxi in 2019.
Construction of infrastructure projects
The Ministry of Transport of China has initiated a three year action plan to build a modern China by the construction of mega infrastructure facilities. The development of urban agglomeration like the Yangtze River Delta Economic Zone and Beijing-Tianjin-Hebei Region and the construction of major infrastructure projects in Western and Central China is expected to drive the demand for cement.
The demand for cement has risen sharply in account of urbanization and industrialization. The net output of the construction industry increased at a 15 per cent annual average between 2006 and 2013, according to the National Bureau of Statistics of China. Over the past three decades, houses, bridges and roads have been Built in China with remarkable speed.
Weakening Coal Price
There is an oversupply of coal in China. As a result, the China has stopped all coal imports from across the globe. The thermal coal prices for delivery to China declined hugely to USD 60/tonne from USD 90/tonne. As coal is one of the important raw material in the production of coal, the weakening of coal price in China is driving the growth for cement industry.
China is home to four of the 10 largest cement producing companies namely Anhui Conch, CNBM, China Resources and Sinoma. China exported the highest dollar value worth of cement in 2017 followed by Thailand and Turkey. China exported 6.6 per cent of total exported cement worth US$ 580.4 million.
- Cement plants is China is one of the major contributors to China’s pollution. China’s cement industry contributes 15 to 20 per cent of PM2.5, 3 to 4 per cent of SO2 and 8 to 10 per cent of NOX to the China’s total emissions, as per Ministry of Environmental Protection.It is also estimated that around 1.6 million Chinese die every year from respiratory illness associated to small particulate matter emissions, of which 27 per cent come from cement production.
- Overcapacity has been the major problem for cement industry in China. The NDRC has warned that China is producing excess cement and the country’s capacity utilization was just 69 per cent. Consequently, several Chinese regions have banned the construction of new plants. A nationwide ban on 32.5 grade cement production was announced by NDRC in April 2014.
- Chinese cement industry is highly competitive and the competitor's compete with each other for energy resources, raw materials, customers, skilled labor force and distribution network.
- China’s State Council approved a five-year plan to invest US$ 277 billion to reduce air pollution. This plan targeted to reduce emission by 25 per cent and cut the emissions limits on cement plants.
- 100 per cent FDI is allowed in the Chinese mining industry under the automatic route for cement production.
- A 'ecological civilization' plan was released by China's State Council to make companies more accountable for the pollution they cause.
- The government of China initiated a three year action plan (2018-2020) on 27 June, 2018 to minimize the air pollution. On this plan, the key regions have been expanded to include Fen-Wei Plains, which covers Xi'an and parts of Shanxi, Henan and Shaanxi. In 2017, these areas contributed to nearly 12 per cent of China's clinker capacity. The Fen-Wei Plains has the highest level of sulphur dioxide pollution and PM2.5 level are also the highest. It is estimated that the inclusion of Fen-Wei Plains to the action plan will lead to 2 per cent reduction to China's clinker production.
Other Key Market Trends
- China alone contributed to more than 50 per cent of the global cement production followed by India. In 2017, China produced more cement than the rest of the world combined production. China produced 2.4 billion metric tonnes of cement while the rest of the world produced 1.7 billion metric tonnes.
- China is using energy efficiency measures and alternate fuels like used car tires, waste straw and municipal waste for cement kilns.
- The infrastructure, urbanization construction and property segments are expected to account for 38 per cent, 24 per cent and 37 per cent of PRC cement consumption respectively.
- Chinese cement industry uses vertical shaft kilns and rotary kilns to producer clinker, which is key ingredient in cement.
Market Size and Forecast
- From 1986 to 2016, the annual output volume of cement in China increased from 166 million tonnes to 2,403 million tonnes, growing at a CAGR of 9.3 per cent.
- The per capita consumption of cement in China stood at 1710 kg.
- China is the top cement exporter in the world, owning 9.5 per cent of the global cement export market.
- The clinker capacity in China is expected to fall by 1.6 per cent in 2019/2020 in account of China Cement Association’s plan to cut capacity (2017-2020).
- The below table shows the production volume of cement in China from December 2017 to December 2018. China produced around 183.94 million metric tons of cement in December 2018.
The below tale shows that demand forecast for cement industry in China.
China’s top 10 cement producers accounted for 56.7 per cent in terms of clinker capacity in 2017. In Anhui, the two largest cement producers in China, CNBM and Conch Cement controlled 73 per cent of total clinker capacity. By 2020, the China’s top 10 cement producers are expected to control 80 per cent of the market share. While the two largest cement producers are expected to control 65 per cent of clinker production capacity in the ten provinces. After the merger of CNBM with SINOMA and BBMG, the cement industry is expected to consolidate. The Chinese cement industry is expected to become more consolidated as large firms are acquiring and merging small firms to increase their presence across the country.
Key Market Players
The top 20 cement producers in China operate 270 integrated cement plants with total production capacity of 861.48 Mt/yr. The below table shows the top 20 producers with their capacity.
It is the China's largest cement producer that manufactures and sales cement and clinker. It's largest shareholder was Anhui Conch Holdings and Conch Venture Investments. The company's leading products are high grade cement and commodity clinker of 'CONCH'.
It is a publicly trading company that is involved in producing cement, glass fiber, lightweight building material and gypsum. It's subsidiaries include China United, South Cement, North Cement and Southwest Cement.
Taiwan Cement It was originally a government owned company and turned private in 1954. Taiwan Cement Ltd Corporation was incorporated jointly by the Taiwan Provincial Government and Ministry of Economics Resource Committee on May 1, 1946. The company is involved in the production of cement, furnace powder and ready mixed concrete.
Cement industry in China is driven by surge in construction activity, infrastructure projects, urbanization, high disposable income, and advancement in technology among others.China is not only the largest cement producer but also carbon dioxide emitter in the world.
- Bn - Billion
- CAGR - Compound Annual Growth Rate
- CNBM - China National Building Material
- MTPA - Million Tonnes Per Annum
- NDRC - National Development and Reform Commission
- US - United States